U.S. hotel room demand fell for a fifth consecutive week during the week of Dec. 7-13 and has fallen in 23 of the past 33 weeks.
Revenue per available room has seen a similar number of drops, declining by 1.1% during the week. Hotel occupancy fell 0.9 percentage points and with supply gains, it has decreased in all but three weeks since May.
Average daily rate hasn’t been much of an offset to the occupancy decreases, rising by 0.4% the week of Dec. 7-13. Since May, weekly ADR growth has averaged 0.5%. This is the lowest ADR increases the industry as ever seen in this period except during recessions and the pandemic. But as we have pointed out over the past several weeks, the U.S. hotel industry’s total performance figures don’t tell the entire story.
Hurricane markets, those that were affected by Hurricane Helene and Hurricane Milton in 2024, continued to be a big drag on year-over-year comparisons, accounting for 64% of this week’s hotel room demand loss. Las Vegas was also a significant contributor as its demand decline made up 20% of the industry’s total loss. Excluding them, U.S. RevPAR was up 0.5% via a 1% ADR increase as occupancy was down 0.3 percentage points. While better, there is still weakness in the remaining markets as room demand has been flat (-0.1%) since May and weekly ADR growth has only averaged 0.8%.
RevPAR rose in several hotel markets but at sluggish pace
Excluding Las Vegas and hurricane market Tampa, RevPAR in the top 25 U.S. hotel markets was up 0.6% on a 1.8% ADR gain. Most of the increase came on the weekend where RevPAR rose 1.7%. Weekday RevPAR was flat (0.2%) due to declines on Sunday, Monday and Tuesday. Wednesday and Thursday combined RevPAR was up 1.7% like weekend RevPAR.
The Sunday through Tuesday RevPAR weakness was driven by sharp RevPAR decreases in New Orleans (-50.2%), San Diego (-38.6%), Washington, D.C. (-23.5%) and Oahu (-14.5%) due mainly to conference shifts. For example, a year ago New Orleans hosted as the American Society of Health-System Pharmacists (ASHP) Midyear Clinical Meeting & Exhibition. Excluding those four markets, RevPAR in the remaining top 25 markets was up 5.4% Sunday through Tuesday driven by growth in Anaheim (Orange County), Orlando, Phoenix, St. Louis, and New York as RevPAR was up by more than 7% in each market. In fact, if you exclude those four markets along with Las Vegas and Tampa, full-week RevPAR was up 4.3% on a 3.7% ADR gain with occupancy rising 0.3 percentage points.
New York hotels had a very good week with RevPAR rising by 7.9% on an 8.7% ADR increase. Occupancy topped 92.5%, its highest level of the past nine weeks, but down 0.6 percentage points from a year ago. Group demand however was strong, up 10%.
New York’s holiday season demand trends have encompassed the bifurcation we have seen in the U.S. hotel markets. Since the Rockefeller Center Christmas Tree Lighting on Dec. 3, luxury and upper-upscale hotel RevPAR has grown 6.5% while midscale and economy hotel RevPAR is down 18.2%. ADR in New York over this period was $543, with luxury and upper-upscale ADR over $704 and up 8.6% year over year. Midscale and economy hotels had an ADR of $219, which is a decrease of 10.5%.
RevPAR in non-top 25 markets excluding the hurricane markets was up 0.5% in the week as a third of them saw weekly RevPAR increase by more than 3%. Baltimore saw the largest RevPAR increase (+40.6%) followed by three other markets where RevPAR grew by more than 25%. Baltimore hosted the annual Army versus Navy college football rivalry on Saturday, Dec. 13. Weekend RevPAR jumped 92.2% via growth in ADR (+47.3%) and occupancy (+20 percentage points).
Bifurcation not going anywhere
Among just luxury and upper-upscale hotels, group demand was down 5.7% with group ADR up 3.7%. In the top 25 markets, group demand was down 7.5% this week due to sharp decreases in the markets previously mentioned. Without those markets, group demand was flat (+0.4%) with group ADR up 7.5%. Group demand was also flat in markets that have a convention center between 100,000 and 499,999 gross square feet.
Weekly RevPAR was down in all hotel types except the luxury class, which increased 1.5% on a 3.3% ADR lift. Economy class hotels saw the largest RevPAR decrease, down 8.1%. Excluding the hurricane markets and Las Vegas, RevPAR was up 4.2% in luxury hotels with economy hotels down 3.2%. The other class types reported a range of RevPAR change from flat (-0.2%) in upper midscale to down 0.9% in midscale.
Near-term US outlook not great
U.S. hoteliers can expect RevPAR to be down in most of the remaining December days despite the prediction of record travel. Based on 24 years of historical data, the holiday period that begins with Wednesday Christmas Eve and ends with a Thursday New Year’s Day produces the weakest demand and ADR growth. In the months ahead, U.S. hotel performance in the first quarter of 2026 will continue to face stiff headwinds from hurricane markets before abating in the second quarter.
Growth remains strong in most countries/regions outside the US
Global hotel RevPAR, on a same-store basis and excluding the U.S., increased 6.3% via a 6% ADR gain during the week of Dec. 7-13. Like in previous weeks, the growth was led by countries in the Gulf Cooperative Council (GCC), which collectively grew 20.6%. Other large gainers included Australia (+16.4%), Spain (+16%), and the Caribbean (+10.2%). China, Canada and Mexico hotels again saw weekly RevPAR fall.
Canada’s decrease was centered in Vancouver, which held the final Taylor Swift’s Eras tour shows a year ago. RevPAR was down every day by double-digits even though the shows occurred early in the week. Without Vancouver, Canada’s RevPAR was up 4.1% on a 4.2% ADR increase. RevPAR was up in Toronto and Montreal, rising 4.3% and 5.8%, respectively.
The RevPAR decline in Mexico was again in key destination markets including Mexican Caribbean (-11.3%), Baja California (-9.8%), and Cancun (9.2%). Once again, Mexico City saw strong growth (+17.2%) mostly on occupancy but ADR also saw solid growth (+6.8%).
All but four of China’s 48 markets saw RevPAR decline in the week. The exceptions were Hong Kong (+19.6%), Sanya (+5.7%), Guangzhou (+3.1%) and Shenzhen (+2.3%). Shanghai and Beijing – the country’s two largest hotel markets – were down 2.3% and 1.9%, respectively.
Outside of the U.S. and on a same-store basis, luxury-class hotels were also in the lead with weekly RevPAR up 9.4% followed by upper upscale (+6.4%) and upscale (+7%). All classes were up this week with the lowest growth rate seen in midscale (+0.5%).
Isaac Collazo is senior director of analytics at STR.
This article represents an interpretation of data collected by CoStar's hospitality analytics firm, STR. Please feel free to contact an editor with any questions or concerns.